Is your EU trademark protected against the use of a similar sign when there is only a risk of confusion in a part of the EU?
In the EU, an EU trademark registration can be obtained which is valid in the entire EU. Such EU trademark registration protects the EU trademark owner inter alia against the use of a similar sign if there exists a risk of confusion between the EU trademark and that sign. But is your EU trademark also protected against the use of a similar sign, if there is only a risk of confusion in a part of the EU, such as one country?
The European Court answered this question in an important judgment on the territorial scope of protection of an EU trademark. It follows from this judgment, that if a confusingly similar sign creates a risk of confusion with an EU trademark in one part of the EU, whilst not creating such risk in another part , there is an infringement of the EU trademark which must be prohibited in the entire EU, except for the part of the EU where there is no risk of confusion.
COMBIT versus COMMIT
The German company Combit Software GmbH, specialized in the development of software, owns the German and EU trademarks “COMBIT” for goods and services in the computer industry. Combit Software found out that the Israeli company Commit Business Solution was selling software using the similar sign COMMIT across the EU, including Germany.
Combit Software brought proceedings against Commit Business before the German court in first instance. In these proceedings, Commit Business was ordered to refrain from the use of COMMIT in Germany. This order was based on Combit Software’s German trademark registration. However, Combit Software took the view that the German court should have prevented the use of COMMIT in the entire EU, based on Combit Software’s EU trademark registration for COMBIT.
No risk of confusion on a part of the EU?
Assessing if there is a risk of confusion requires an examination of all relevant factors of the case at hand. This includes a visual, phonetic and conceptual comparison of the signs at issue, in particular, their distinctive and dominant components. The German appeal court considered that the use of the sign COMMIT gives rise, on the part of the average German-speaking consumer, to a likelihood of confusion with the trademark COMBIT. However, it also considered that there is no likelihood of confusion on the part of the average English-speaking consumer, who understands the conceptual difference between “to commit” and “combit”. The latter is made up of “com” for computers and “bit” for binary digits. Therefore, the phonetic similarity between “commit” and “combit” is – from the perspective of the English speaking consumer – cancelled out by that conceptual difference.
The German appeal court was uncertain what to rule in such situation and requested the European Court for explanations by means of a preliminary ruling.
European Court: Territorial scope of prohibition can be limited
The European Court held that, if the use of a sign creates a likelihood of confusion with an EU trademark in one part of the EU, whilst it doesn’t in another EU part, the court cannot conclude that there is no infringement of the EU trademark: The reason for this is that the function of the EU trademark as an indication of origin is adversely affected and, as a consequence, the EU trademark is infringed.
In order to guarantee the uniform protection in the entire EU, the prohibition must, as a rule, extend to the entire EU. However, if it is established that the use of a similar sign does not create any likelihood of confusion in a specific part of the EU, the court must limit the territorial scope of the prohibition. The EU trademark owner cannot prevent the use of a similar sign in parts of the EU where there is no likelihood of confusion: such a prohibition would go beyond the exclusive right of the EU trademark owner.
The European Court emphasized that the part of the EU, in respect of which there is no risk of confusion, must be identified with precision: when referring to certain linguistic areas of the EU, such as “English-speaking”, it must be clear which areas are actually covered.
This judgment confirms the uniform protection of an EU trademark right in the entire EU. However, it also provides a possible defense for companies confronted with an EU trademark owner’s cease-and-desist claim preventing the use of their alleged infringing sign in the entire EU: even when infringement of the EU trademark is established, the prohibitive court order might not extend to a certain part of the EU if there is no likelihood of confusion in that part of the EU.